Keynes’s trust in the power of ideas is, of course, attested to in the last paragraph of The General Theory and, broadly, in his whole life-work. But in the wake of the 1929 crash he himself wrote to Lydia Keynes that he was ‘becoming more fashionable again’, a statement that recognises the power of events in causing, if not ideas, at least acceptability of ideas. And, indeed, nothing helps as much as trouble in softening hallowed certainties, especially when these are based on easy logic rather than experience. In the early phase of the Depression Keyne’s attack on the unrealistic structure and conclusions of classical economics was carried out mainly in two forums, the Macmillan Committee and the Committee of Economists. In both he introduced the outlook of experience, believing that, paradoxically enough, 150 years after Adam Smith there was actually no explanation for the trade cycle!1
KeywordsClassical Economic Capital Account Extensive Mind Bank Rate Income Account
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- 21.R.S. Sayers, The Bank of England: 1891–1944 (Cambridge: 1976), Vol. 1, p. 363.Google Scholar